Supreme Court Stays GST Proceedings Against Online Gaming Companies
NEW DELHI: In a significant relief for the online gaming sector, the Supreme Court has stayed Goods and Services Tax (GST) proceedings against 49 online gaming companies. This decision comes in response to retrospective demand notices issued, which had sent shockwaves through the industry.
A bench comprising Justices J B Pardiwala and R Mahadevan passed the interim order, with the matter scheduled for further hearing on March 18. The GST Council had previously imposed a 28% tax on the face value of online gaming bets, leading to allegations of GST evasion amounting to Rs 1.1 lakh crore, with potential liabilities soaring to Rs 2.3 lakh crore due to penalties.
Industry Response and Market Impact
The stay has sparked optimism among market players, pushing up stock prices for several gaming companies. For instance, casino operator Delta Corp saw a 4.9% increase in its share price, while Nazara Tech experienced an 8.5% surge before closing lower.
Online gaming companies have been advocating for a tax calculation based on gross gaming revenue (GGR) rather than the face value of bets. Saumya Rathore, co-founder of Winzo, expressed hope for a fair resolution that could enhance innovation and investor confidence in the Indian gaming ecosystem.
Future Outlook
The ongoing legal battles highlight the need for clarity in tax policies affecting the gaming industry. As the Supreme Court deliberates on these matters, companies are keen to navigate this complex landscape effectively. To stay updated on the latest developments in the gaming and tax sectors, visit Looffers.com for exclusive offers and insights.
